According to stories handed from generation to generation, ragay was a former visita (part) of Lupi until its separation on April 15, 1753. The Municipality of ragay was located along Paculago River and was named after it. During those years it was inhabited by Bicol, Tagalog and Visayan speaking individuals and communities. In the same period, Moro pirates were continuously raiding the settlement in Paculago and plenty of these Moros died and were buried in the place. However, due to the Christian belief that prohibited burying Moros together with Christians, and due to the continuous raiding of their settlement by the Moros, the settlers left Paculago and transferred to the upper portion of ragay river.

The new settlement was called “Hagay” which means single, inhabited by pure Christians. The name Ragay started way back in 1840’s. When the Moros finally stopped raiding the settlers of Hagay, the town was transferred to its present location. This was the time when the Spaniards came. Upon arrival a Spanish soldier tried to ask one of the female settlers her name.

The lady, without understanding what the soldier was asking, answered “Hagay” but the soldier misheard the name as “Ragay”.